Nogger's Blog

14/11/11 -- EU grains finished mixed but mostly lower with Nov 11 London wheat down GBP1.50/tonne to GBP147.00/tonne and Jan 12 Paris wheat falling EUR1.75/tonne to EUR182.75/tonne.

The latter came within less than a euro, and the former less than a pound of being the lowest closes for a front month since July 2010.

It was a fairly quiet and subdued session. The markets drew some solace from the fact that both Italy and Greece have had a change of leadership in the past few days. Even so stocks were down in London and on the continent after an Italian bond auction saw yields climb to a 14-year high of 6.29 percent. The market will now be looking to see how Spain fares with it's auction of 10-year bonds on Thursday.

There wasn't a great deal of fresh news around. Algeria are tendering for 50,000 MT of wheat, an order that would normally be expected to get filled by French origin material.

The world grain trade is looking a lot more competitive and cut-throat than it did six months ago. US corn and Paris wheat are down around 15 percent since then, with London wheat falling almost 20 percent.

A Vietnamese buyer bought Indian corn rather than US origin material over the weekend, whilst Australian feed wheat continues to displace US corn into Asia priced at around USD75/tonne cheaper on a delivered basis.

Corn harvesting in Ukraine is 83% done producing a crop of just over 18 MMT to date, suggesting final output of close to 22 MMT. They too are heavily discounting US corn into homes that would normally be considered an American stronghold.

Reuters quote the Russian Hydrometcentre as saying "weather conditions are highly favourable and the state of winter crops (there) are very good."